Chapter 18

18. The U.S. Senate as a Dysfunctional Institution for Funding Development

In the late summer of 1998, a large delegation of Armenian Diaspora visited Armenia to commemorate the 100th World Food Flight. There was ceremonious recognition of humanitarian aid received via the flights. But it was during a meeting at the U.S. Embassy that passion levels rose as one of the leaders announced that “Armenians will not rest until the Armenian land occupied by the Turks is returned to its rightful owners, even if it takes a thousand years.” U.S. recognition of genocide by the Turks would be a first step.

The unresolved genocide and loss of Western Armenia to the Ottoman Turks is still the principal focus of the Diaspora. They want Mt. Ararat; they want the ancient city of Ani in Turkey. They want their property back.

Some believe that genocide is still a threat. Baroness Caroline Cox, House of Lords, recently sent an open letter to Armenia in which she stated her fears that Armenians are threatened with genocide by the Islamic revolution. The Russians welcomed the news. The only remaining hold the Russians have in Armenia is to “protect” them from the Turks. So far it works. They have troops here to guard the border, and they sell MIGs to the Armenian air force. Welfare impacts of the Russian force go beyond air defense. Many of the “Russian troops” are Armenian. In a country with significant unemployment, someone else paying your solders is a good industry to have.

Because of the unresolved genocide issue in U.S. policy, where the genocide is not officially recognized, American Ambassadors have a difficult time with Armenian Diaspora. It was early October, 1999 when Ambassador Lemmon hailed me as I was driving by his house. Not often does the Ambassador stop me in the street. I usually see him by appointment only. He didn’t want to talk about the weather; he wanted to talk about his problems with the Diaspora. He said “A guy was just in my office and he’s the same guy who grilled me at my confirmation hearing in the Senate.

After visiting the Ambassador, “The Guy” visited my office a few days later and asked that I make a grant to his NGO of $700,000, and then get it back by putting it in my next budget talks with the Ambassador. I told him that we only made grants based on proposals having scientific merit, and that all of our proposals would have USDA MAP oversight. He said, “Does that mean we have to become employees of an organization that has two employees for every real farmer in America?” I tried to describe our grant program, but he walked out without another word.

Anyone who has any interest in foreign development usually forms a non-government organization (NGO). These are usually good business because the big budget planners, like USAID, our Foreign Agriculture Service, and the World Bank, are likely to run major development projects using NGOs. Armenia has about 3,400 NGOs. Business for the NGOs is good in Armenia, even though USAID spends the really big dollars on a small group of insider consultants from the Washington beltway.

Save the Children, VOCA, the Methodist Church, Armenia Tree Project,the Catholic Church and the Seventh Day Adventists are some of the NGO who do good work on American taxpayer money. In 1998-2000, USAID had a $60 million annual budget in Armenia. There are, however, risks. You might get $3 million this year and nothing next year. For reasons too numerous and hypothetical to mention, but nonetheless interesting, this is a famine grant year for “The Guy’s” NGO. To make matters worse, they were visited by the Armenian Ministry of Finance (MOF) who said they had not paid their social security payments for six years. MOF opened their safe and took all of their cash. Eastern Armenians are not always on track with their western cousins.

This story continued past October with other interesting bits and pieces, like the letters in which the Ambassador endorsed my proposals.

With Lemmon’s approval, I did assign funds ($250,000) to the NGO, but was payment for bailing out their existing programs to develop improved wheat varieties. They were doing good work, and it was an area of applied research that I consistently avoided funding by USDA.

Nevertheless, the NGO labeled this as a “takeover” of their program as I required reports on how the money was spent and I didn’t provide any funds for their program overhead or for their in-country manager. Nowhere did I even approach the “takeover” attributed to me. The bogus “takeover” story appeared in an April 10 letter received by Deputy Secretary Rominger (USDA Deputy for US Secretary of Agriculture Glickman).

The letter was from “The Guy” and was addressed to “Dear Rich.” “(Our NGO) has encountered a problem with key USDA employees, namely Bill Miller, in Armenia, and Tim Grosser from Washington, DC. Grosser is with Cooperative State Research, Education and Extension Service. (Our NGO) was in discussion with Bill Miller for funding of its established seed multiplication program, and at his request (?) on October 15, 1999, (We) presented him with a proposal and a budget for $700,000. To this date, (We) have received no response from USDA regarding that proposal. Instead, USDA has proposed to take over the seed multiplication programs and staff of (our NGO). USDA has offered to provide token financing for several other projects, but its main response has been mainly to take over the program and staff. In the corporate world this would be considered a hostile takeover.” ---- “Rich, I feel uncomfortable to write to you on this manner. However, there is principle of integrity here that justifies my doing so.”

I thought the letter was meant, indirectly, for the Ambassador eyes. It would be bad lobbying to attack him directly. I know that the NGO knows it is the Ambassador who is running the show in Armenia for anything that has a price tag of $700,000. I told “The Guy” as much when he visited me. Also, the approval for $250,000 came during a meeting with the NGO Manager. He said to the NGO Manager, “How dare you people threaten me! You will learn that I am here to promote development, not organizations. You cannot threaten me by taking your case to the Hill. Take it to the White House if you want, but you will not change a decision based on program merits.” Even more emphatic statements followed.

There was more to follow. Deputy Secretary Rominger sent the “Dear Rich” letter to Tim Grosser and asked him to answer. Tim sent it to me, and he also sent me Rominger’s letter to (the NGO) that said “I am sorry to hear of your difficulties with the USDA program in Armenia as it gets very good reviews in other quarters. I would like to meet with you and hear more about this.”

The political pressure continued. Diane Tsitsos the Director of USAID-Armenia, called me and said, “What do you know about (this NGO)? They are asking me for money. Can’t you do something for them? I don’t want to get involved in agriculture.” I said “Diane, welcome to the club.” She said, “What does that mean?” I said “As of now, I am the fall guy, but you are welcome to have my place.” Then I told her some of the story and advised that maybe she should talk to the Ambassador. She said, “Well, they completely failed in Nogorno Karabagh, just walked off the job because they didn’t like working with Save the Children. What will I do with them?” I opined that I didn’t know.

Many of the NGO were finding it hard to spend the congressional appropriation for Ngorno Karabakh. For one, it is hard to spend $20 million per year in aid on less than 200,000 people, and two, a lot of the money has rebuilt Armenian villages not in NK, but in parts of Azerbaijan occupied by Armenia.

The occupied lands are the parts of Azerbaijan that lie around the enclave of NK and between NK and Armenia, In AID offices and in other venues you may see maps that show NK and significant occupied territories. These territiores define NK and the occupied territories as an area about one fourth the size of Armenia. This does not sound like the road to peace.

The NGO hired a Washington lawyer to call Tim Grosser and ask him a lot of questions about USDA work in Armenia. Obviously this was an attempt to intimidate even though the lawyer apologized for the personal attacks. Tim said he appreciated the apology but he didn’t appreciate one bit of news from the conversation. The lawyer said that we had not heard the last of the NGO because they were taking their complaint to the “Congressional level.” I am sure they did because of what happened next.

Taking it to the congressional level means to call your congressman. In this case it was congressmen Cal Dooley (D) of California. His spokesperson called USDA and asked for some clarification of why Bill Miller had not replied to the (our) proposal for $700,000, and what was MAP in Armenia doing with its $8 million budget? This strategy of calling your congressman can be fairly efficient if he (Dooley) is a member of the House Agriculture Committee who approves USDA budgets, and Dooley was a powerful member.

We didn’t have an $8 million dollar budget in MAP, but we did have $6.63 million not yet approved. I didn’t know how many more “little USDA budgets” might be on Dooley’s desk, but I expect it was enough to capture the attention of the Secretary of Agriculture and his deputy “Dear Rich.”

More news came on the NGO political campaign. Tim Grosser said today that he received a fax copy of a letter written by California Secretary of State Bill Jones to USDA Secretary Glickman. The letter requested:

“that Glickman close the loop on the $700,000 grant requested from USDA and from which nothing has ever been heard. Don’t let your employees (meaning Bill Miller) fragment our program.”

Summary

The Armenian Diaspora lobby can “take it to the hill” and get results. They can have the Secretary of Agriculture California take their case directly to the Secretary of Agriculture U.S. who can discuss it with the State Department who can discuss it with the US Ambassador. They are on a first name basis with Deputy Secretaries. They can refer their requests to one of the largest caucus groups in Washington, 159 Congressmen in 2007 -- a lobby that influences the Senate Oversight Committee on Aid, led by Senator Mitch McConnell,R.,to increase Armenian aid above the White House budget by as much as $20 million per year. The Senate earmark for aid to Armenia in 1998 was $95 million; Armenia is consistently among the highest per capita recipients of U.S. foreign aid. MAP can do none of the above. MAP had the support of U.S. Ambassadors, but their funds come from Congress.

This story about the Ambassador and Armenian NGO makes the Armenians appear as irascible and irrational. Irascible they may be, but irrational, no. The Armenians Diaspora understand the system, and, in light of the system, their attack on me was just part of the game. The game is not a simple tit for tat, but one of using maximum access to decision-makers. They wanted a $700,000 grant with no strings attached because they believed Armenian support for the U.S. domestic political agenda warranted some consideration for Armenian use of foreign aid. After all, the U.S. Senate has annually increased the budget for Armenia above requests in the White House budget.

When a major contributor to the Armenian-American political action committee was asked why he personally gave $50,000 to causes supported by Senator McConnell in the Senate Oversight Committee for Foreign Aid his answer was straight forward. “And what do we get in exchange for that support? “Nothing more than a stable supply of foreign aid.”

There is little doubt that foreign aid programs are biased by domestic politics and political donations. Any concept of “What is the best economic development program” is warped by special interests. It is logical that an Armenian NGO would expect that $700,000 would be only a small part of an extra $20 million in the Ambassador’s budget, gained from successful lobbying in Congress.

Successful lobbying does not mean, however, that the system is broken. As the Armenia experience indicates, winning the lobby effort does not necessarily mean that you can spend the money. Our system is complex. Under the best conditions it is hard to find and influence decisions on foreign development. But Americans continue to believe that information is valuable in the U.S. system. If MAP was a superior development model, then continuing to publicize its role in Armenian development may attract its own lobby group among the education community and perhaps it will attract the right decision-makers. Somebody must take it to the hill. America must continue to win the rural and urban base of developing countries. That is one goal of this book.